ETF Tracker Newsletter For September 2, 2016

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ETF Tracker StatSheet

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https://theetfbully.com/2016/09/weekly-statsheet-for-the-etf-tracker-newsletter-updated-through-09012016/

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Market Commentary

STOCKS INCH UP ON THE WEEK; SAMSUNG HEARS A PING

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks ended higher Friday as traders examined a critical monthly report on job growth that could carry implications for Federal Reserve policy. The anticipated jobs report was particularly crucial because the Fed is closely examining economic data for guidance as it sets interest-rate policy.

The report estimated August growth of 151,000 jobs and the unemployment rate flat at 4.9%. On average, economists surveyed by Bloomberg were projecting growth of about 180,000 jobs in August and an unemployment rate of 4.8%. The top leader in jobs creation was Education and Health with 39,000 closely followed by Minimum wage food services and drinking places adding 34,000. Leading up to today’s jobs report were the worst 2 weeks for US Macro data in 6 months making a mockery of the alleged recovery and confirming that, other than saving face, there is no reason for the Fed to consider an interest rate hike.

In the world of smart phone tech, Samsung announced that it is going to have to recall 2.5 million units of its recently released Galaxy Note 7 smart phone. The announcement came after discovering batteries of some phones exploded while they were charging. While this incident may be a temporary headline, the company feels confident that its brand name will continue selling strong moving forward.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 09/01/2016

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ETF Data updated through Thursday, September 1, 2016

TOC082516

Methodology/Use of this StatSheet:

  1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.
  2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use a 7.5% trailing stop loss on all positions in these categories to control downside risk.

  1. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 7.5% -10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.

 

1. DOMESTIC EQUITY ETFs: BUY — since 4/4/2016

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) remains above its long-term trend line (red) by +2.78% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.

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Drop And Pop

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

August was a quiet month for the U.S. stock market, with volatility at very low levels.  The S&P 500 did not see a day with a change of 1% in either direction the entire month. However, a six-month winning streak was snapped in August for the Dow and, as you may know, we could be in for a bumpy ride this month due to the fact that September has historically been one of the worst months for blue-chip stocks.

Stocks did post a slight gain today ahead though ahead of a key jobs report on deck for Friday that could give great insight regarding the Fed’s next move on interest rates. On Wednesday, payroll processor ADP reported that private employers created 177,000 new jobs last month, topping forecasts by 2,000. That solid number could suggest a strong government employment report tomorrow with very likely the record being set for new part-time bartender and waitress jobs.

U.S. auto sales cooled off in August, which might be signaling that the industry may not break last year’s all-time record, despite a strong first half of the year. The auto industry has been hovering near 2015’s record pace of 17.5 million vehicles, fueled by allegedly strong employment, low gasoline prices and a solid housing market. Or, you could be more realistic and give credit to strong auto sales thanks to not only record subprime financing but also for periods up to 10 years.

And in big box retail, Walmart (WMT) announced today that it plans to shed about 7,000 store accounting and invoicing positions as the company moves to automate those processes. The company confirmed though that workers will be offered positions elsewhere in their stores.

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August Ends With A Whimper

Ulli Market Review Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Wall Street shares dipped lower on the final trading day of August, a month that has been void of market scares, as traders look ahead to a key jobs report Friday and a Federal Reserve decision on interest rates in late September.

Both the S&P 500 and Dow ended the month basically flat, with the S&P 500 posting a fractional loss. Perhaps more importantly is that the broad market average snapped a five-month winning streak.

The market calm, however, might not continue as investors brace for what could be a market-moving September. The first big event comes Friday, when the government releases the August jobs report. If the number comes in strong, or around or above the 180,000 jobs economists’ forecast, it could boost the odds of a Fed rate hike at the central bank’s Sept. 20-21 meeting, unless the Fed simply continues its game of crying “wolf.”

As you know, the Fed has kept rates steady all year, after boosting rates off zero back in December, its first rate hike in nearly a decade. Wall Street is not prepared for a September rate hike, and is betting the first hike in 2016 won’t come until December at the earliest. If the Fed moves earlier than expected, market volatility is likely to elevate quickly.

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Oil Trips And Market Slips; Apple Back In The News

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Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities ended a bit lower Tuesday after starting off in positive territory as investors digested news that Apple could owe back taxes in Ireland and continued to focus on what the Federal Reserve’s next move on interest rates might be as Friday’s key jobs report looms.

Wall Street continues to waver on whether the Fed will hike interest rates for the first time this year, after Fed Chair Janet Yellen said Friday that the case for a rate increase had “strengthened” recently. There is a camp on Wall Street that believes the Fed will move at its Sept. 20-21 meeting if the August jobs report, set for release Friday, comes in strong.

Also weighing on stocks Tuesday, following Monday’s 108-point Dow gain, was the news surrounding iPhone maker Apple, a stock that has a sizable weighting in all three of the major U.S. stock indexes. The news today was that Apple must pay up to $14.5 billion in back taxes to Ireland, the European Union ruled Tuesday after the bloc’s anti-trust arm concluded that the technology firm was given illegal tax benefits over two decades. Ouch! Apple (AAPL) shares ended the day 0.8% lower, to $106 even.

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Slightly Higher—But Speculation Still Looms

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks closed higher Monday and the Dow broke a 3-day losing streak, even as investors continue to calculate the odds of a (potential) Federal Reserve interest-rate hike later this year.

Much of the focus throughout Wall Street has remained on the trajectory of interest rates, which have not increased for eight months, despite much speculation.

Federal Reserve Chair Janet Yellen said last Friday (in a highly-anticipated speech) that the case for an increase had “strengthened,” leaving open the door for an increase at the Fed’s September or December meetings.  The ‘market moving’ event was already priced in apparently, given that the markets came out positive today.

From the world of retail:  J. Crew’s vibrant collection of women’s wear will soon be available inside department store chain Nordstrom (JWN), as the struggling apparel brand looks for ways to get customers spending again.  A partnership with Nordstrom aligns with the company’s customer service strategy of emphasizing design, quality and style, which appeals to most Nordstrom customers.

In energy, U.S. Crude Oil closed down slightly lower today at $46.95 a barrel, which remains well under the $50 a barrel cap that most analysts were projecting for the summer months.  Now that the summer months are over, it shall be interesting to see not only how prices move throughout the fall but if the correlation with the S&P 500 is maintained.

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